380 Special Inspector General for Afghanistan Reconstruction

Transcription

1 SIGAR 380 Special Inspector General for Afghanistan Reconstruction SIGAR Audit Afghan Special Mission Wing: DOD Moving Forward with $771.8 Million Purchase of Aircraft that the Afghans Cannot Operate and Maintain JUNE 2013 SIGAR Audit 13-13/Afghan Special Mission Wing

2 SIGAR Special Inspector General for Afghanistan Reconstruction WHAT SIGAR REVIEWED The U.S. Department of Defense (DOD) developed a concept of operations to address a need for air support for Afghan Special Forces that execute counternarcotics and counterterrorism missions in Afghanistan. In July 2012, the Afghan Special Mission Wing (SMW) was established to meet that need. The SMW has an existing fleet of 30 aging aircraft, 10 of which are on loan from the Afghan Air Force; DOD s concept calls for 48 new aircraft costing a total of $771.8 million. This report identifies (1) the extent to which the SMW has the capacity to operate and maintain its current and planned fleet; and (2) the effectiveness of U.S. government oversight of two task orders valued at $772 million to provide ongoing maintenance, logistics, and supply support to the SMW. To accomplish these objectives, we obtained data and met with officials from DOD, the Department of State, Drug Enforcement Administration, the SMW, U.S. contractors, and the Counter-Narcotics Police of Afghanistan. We also reviewed the status of the SMW s current aircraft, as well as contracts to purchase new aircraft. Furthermore, we reviewed two major U.S. task orders that provide maintenance and repair services to the SMW, with a total obligation of approximately $772 million. We conducted this work in Washington, D.C., Huntsville, Alabama, and other U.S. sites; and in Kabul and Kandahar, Afghanistan, from July 2012 to March June 2013 Afghan Special Mission Wing: DOD Moving Forward with $771.8 Million Purchase of Aircraft that the Afghans Cannot Operate and Maintain SIGAR AUDIT WHAT SIGAR FOUND The Afghans lack the capacity in both personnel numbers and expertise to operate and maintain the existing and planned SMW fleets. For example, as of January 23, 2013, the SMW had just 180 personnel less than one-quarter of the personnel needed to reach full strength. The NATO Training Mission-Afghanistan and DOD do not have a plan that identifies milestones and final dates for achieving full SMW personnel force strength to justify the approved fleet. Ongoing recruiting and training challenges have slowed SMW growth. These challenges include finding Afghan recruits who are literate and can pass the strict, 18- to 20-month U.S. vetting process, a process that attempts to eliminate candidates that have associations with criminal or insurgent activity. Further, the Afghan Ministry of Defense (MOD) and Ministry of Interior (MOI) have not come to agreement on the command and control structure of the SMW, which also adversely impacts SMW growth and capacity. In addition, DOD has not developed a plan for transferring maintenance and logistics management functions to the Afghans. Currently, DOD contractors perform 50 percent of the maintenance and repairs to the SMW s current fleet of 30 Mi-17s and 70 percent of critical maintenance and logistics management, as well as procurement of spare SMW flight crews prepare for a training mission in Kabul on October 30, For more information, contact SIGAR Public Affairs at (703) or sigar.pentagon.ccr.mbx.public-affairs@mail.mil

3 parts and materiel. Finally, we found that the SMW relies heavily on DOD to fulfill its counterterrorism responsibilities, a key part of its role. As of January 16, 2013, only 7 of the 47 pilots assigned to the SMW were fully mission qualified to fly with night vision goggles, a necessary skill for executing most counterterrorism missions. Despite these problems, DOD has moved forward to purchase 48 new aircraft for the SMW. Specifically, in October 2012, DOD awarded a $218 million contract to Sierra Nevada Corporation for 18 PC-12 fixed-wing aircraft, and on June 16, 2013, DOD awarded a $553.8 million contract modification to Rosoboronexport for 30 Mi-17 helicopters. In addition to the challenges related to SMW capacity to operate and maintain its current or planned fleet, we found that two key DOD task orders task orders 20 and 32, which provide ongoing maintenance, logistics, and supply services to support the SMW lack performance metrics, and DOD oversight has been inadequate. Only one measureable outcome was identified in one of the two task orders a requirement that the contractor maintain the fleet at a mission-capable rate of at least 70 percent. SIGAR s review indicates that poor oversight by DOD s Non- Standard Rotary Wing Aircraft (NSRWA) Contracting Division resulted in the contractor failing to properly account for certain aircraft hours in depot maintenance and a misrepresentation of readiness. Further, task orders 20 and 32 do not have quality assurance surveillance plans, and DOD did not have necessary personnel in Kabul with the right authority and requisite experience to effectively oversee U.S. contractor performance. WHAT SIGAR RECOMMENDS SIGAR recommends that the Under Secretary of Defense for Acquisition, Technology, and Logistics suspend all activity under the contracts awarded for the 48 new aircraft for the SMW until the memorandum of understanding between MOI and MOD is completed and signed. Provided the memorandum of understanding between the MOI and MOD is completed and signed, we recommend setting clear personnel and maintenance and logistics support milestones for the SMW and tie the acquisition and delivery of the new aircraft to successful completion of these milestones. SIGAR also recommends that NSRWA and the Commander of Deputy Commander Special Operations Force jointly develop a plan for transferring maintenance and logistics management to the Afghans and incorporate the performance metrics and milestones into a proposed statement of work for the new maintenance and logistics contracting action. Finally SIGAR recommends that the Commander of Army Contracting Command direct NSRWA Contracting Division to modify task orders 20 and 32 to incorporate performance metrics and appropriate quality assurance surveillance plans; ensure that the new contract/task order contains these metrics and plans; and deploy contracting officer representatives to Afghanistan with the appropriate level of authority and the requisite experience to effectively oversee contractor support for the SMW. SIGAR received formal comments on a draft of this report from the Office of the Secretary of Defense (OSD), the North Atlantic Treaty Organization Training Mission-Afghanistan/Combined Security Transition Command-Afghanistan (NTM-A/CSTC-A), U.S. Army Materiel Command, and NSWRA. OSD and NTM-A/CSTC-A did not concur with SIGAR s recommendation to suspend plans to acquire new aircraft for the SMW. Both stated that contracting actions have already been awarded and that the International Security Assistance Force is engaging the Afghan government to formulate a charter that would accomplish the same purpose as the planned memorandum of understanding between the MOI and MOD. However, SIGAR maintains that moving forward with the acquisition of these aircraft is highly imprudent until an agreement between the ministries is reached. SIGAR also notes that, prior to awarding the contract for the 30 Mi-17s on June 16, 2013, DOD received a draft of this report containing a recommendation to suspend plans to purchase new aircraft for the SMW. OSD and NTM-A/CSTC-A concurred with the other six recommendations in the report. The U.S. Army Materiel Command responded to the three recommendations addressed to it and concurred with each. NSRWA, similarly, concurred with the two recommendations addressed to it. For more information, contact SIGAR Public Affairs at (703) or sigar.pentagon.ccr.mbx.public-affairs@mail.mil

4 June 28, 2013 The Honorable Charles T. Hagel Secretary of Defense This report discusses the results of SIGAR s audit of U.S. Support for the Afghan Special Mission Wing (SMW), an air wing supporting counternarcotics and counterterrorism missions in Afghanistan. On June 3, 2013, we provided a draft of this report to the Department of Defense (DOD). The draft report included seven recommendations to various DOD entities that would help protect planned DOD investments in the SMW by (1) suspending major aircraft acquisitions until the Afghan government takes necessary steps to build SMW capacity, (2) linking acquisition and delivery of aircraft to key development milestones, and (3) enhancing DOD oversight of critical functions. Despite our recommendations, the Department awarded a $553,759,240 contract modification to Rosoboronexport, a Russian government agency, on June 16, 2013, for 30 Mi-17 helicopters, spare parts, test equipment, and engineering support services. We maintain that moving forward with the acquisition of these aircraft is imprudent. This final report includes seven recommendations to improve Afghan commitment and sustainability of the SMW and effective DOD contractor performance. When preparing the final report, we considered comments on a draft of this report from the Office of the Secretary of Defense (OSD), the North Atlantic Treaty Organization Training Mission-Afghanistan/Combined Security Transition Command-Afghanistan (NTM-A/CSTC-A), U.S. Army Materiel Command, and the Non-Standard Rotary Wing Aircraft Project Office (NSRWA). In commenting on a draft of this report, OSD and NTM-A/CSTC-A concurred with six recommendations; the U.S. Army Materiel Command concurred with the three recommendations directed to it; and NSRWA concurred with the two recommendations directed to it. Comments from OSD, NTM-A/CSTC-A, and NSRWA are reproduced in appendices V and VI. We did not reproduce comments from the U.S. Army Materiel Command because the command labeled its comments as For Official Use Only. SIGAR conducted this audit under the authority of Public Law No , as amended, and the Inspector General Act of 1978, as amended, and in accordance with generally accepted government auditing standards. John F. Sopko Special Inspector General for Afghanistan Reconstruction CC: The Honorable John Kerry, Secretary of State; The Honorable Eric H. Holder, Jr., Attorney General

5 TABLE OF CONTENTS Background... 2 Lack of Personnel and Technical Capacity Put $771.8 Million DOD Investment in SMW At Risk... 5 DOD s Execution of Task Orders for Ongoing Maintenance and Logistics Support Failed to Hold Contractor Accountable for Its Performance Conclusion Recommendations Agency Comments Appendix I - Scope and Methodology Appendix II - Status of Current Mi-17 Fleet Appendix III - Organizations Supporting The Special Mission Wing Appendix IV - Special Mission Wing Structure and Command and Control Appendix V - Comments from the Office of the Secretary of Defense and the North Atlantic Treaty Organization Training Mission-Afghanistan/Combined Security Transition Command-Afghanistan and SIGAR s Response Appendix VI - Comments from the Non-Standard Rotary Wing Aircraft Project Office Appendix VIII - Acknowledgments TABLES Table 1 - Current and Planned Breakdown of SMW Afghan Manning by Job Type... 6 Table 2 - SMW Operations Completed from May 1, 2012 through October 14, Table I - Status of Special Mission Wing Mi-17 Aircraft, as of February 12, Table II - Organizations Currently Supporting the SMW FIGURES Figure 1 - Planned Aircraft Locations and Breakdown for SMW... 3 Figure 2 - Contractor Air Interdiction Unit (AIU)/Special Mission Wing (SMW) Fleet Data Versus Army Regulation (AR) (in percent) Figure I - Special Mission Wing Organization and Command Structure PHOTOS Photo 1 - Mi-17s at Kabul International Airport... 2 Photo 2 - SMW Warehouse in Kabul... 5 Photo 3 - English Language Training... 7 Photo 4 - Mi-17 Undergoing Maintenance... 8 SIGAR Audit 13-13/Afghan Special Mission Wing Page i

6 TABLE OF CONTENTS ABBREVIATIONS ANA COR CSTC-A DCOM-SOF ETT ISAF MOD MOI NATO NSRWA NTM-A SMW Afghan National Army Contracting Officer Representative Combined Security Transition Command - Afghanistan Office of the Deputy Commanding General, Special Operations Forces Embedded Training Team International Security Assistance Force Ministry of Defense Ministry of Interior North Atlantic Treaty Organization Non-Standard Rotary Wing Aircraft NATO Training Mission - Afghanistan Special Mission Wing SIGAR Audit 13-13/Afghan Special Mission Wing Page ii

7 According to the United Nations Office on Drugs and Crime, about 90 percent of the world s opium comes from Afghan fields, and Afghanistan is a major producer of hashish, a drug produced from cannabis. Intelligence indicates that profits from the Afghan drug trade are being used to finance the Taliban and other insurgent groups operating in the region. In 2009, Afghan drug traffickers earned around $2.2 billion, Afghan farmers earned about $440 million, and Afghan Taliban earned around $155 million from Afghanistan s narcotics trade. 1 The Afghan National Army (ANA) Special Operations Forces mission is to combat the narcotics trade and terrorism in Afghanistan. In December 2011, the North Atlantic Treaty Organization Training Mission Afghanistan (NTM-A), under the International Security Assistance Force (ISAF), identified a need to provide air support to these Special Operations Forces. NTM-A developed a concept of operations for an Afghan air wing dedicated to special operations. Subsequently, the Afghan government commissioned its Special Mission Wing (SMW) in July Since then, the U.S. Department of Defense (DOD) has provided nearly $122 million to support and mentor the SMW so that it becomes an independent and self-sustaining aviation unit capable of conducting professional counternarcotics and counterterrorism missions. 2 Additionally, to provide an enduring air capability to support these missions, DOD has awarded two contracts totaling approximately $771.8 million to purchase new aircraft 18 fixed-wing aircraft and 30 rotary-winged aircraft for the SMW. In addition to this $772 million investment, there will be $109 million per year required for oversight, maintenance, training, and logistics support that DOD intends to provide the SMW over the next several years. 3 This audit assesses (1) the extent to which the SMW has the capacity to operate and maintain its current and planned fleet; and (2) the effectiveness of U.S. government oversight of two task orders valued at $772 million to provide ongoing maintenance, logistics, and supply support to the SMW. To accomplish these objectives, we obtained data and met with officials from DOD, the U.S. Department of State, the U.S. Drug Enforcement Administration, U.S. contractors, the Afghan SMW, and the Afghan Counter- Narcotics Police. SIGAR also reviewed the history and status of all aircraft currently committed to the SMW, as well as a contract to purchase new fixed-wing aircraft and plans to purchase new rotary-winged aircraft. Further, SIGAR analyzed two major U.S. task orders that provide ongoing maintenance and supply services to the SMW, with a total obligation of approximately $121.9 million since the SMW s commissioning in July SIGAR conducted work from July 2012 to March 2013 in Washington, D.C., Huntsville, Alabama, and other U.S. sites, and at sites in Kabul and Kandahar, Afghanistan, in accordance with generally accepted government auditing standards. A discussion of the scope and methodology is in appendix I. 1United Nations Office on Drugs and Crime, The Global Afghan Opium Trade A Threat Assessment, July Afghan drug trade figures after 2009 are not yet available. 2Funding to support the SMW comprises DOD counternarcotics funds and Afghanistan Security Forces Funds. 3U.S. program managers for the SMW estimate sustainment costs (including maintenance, mentoring, training, and parts) for the existing fleet of rotary-wing aircraft at $109 million per year; however, costs to maintain a new fleet of rotary-wing aircraft (as planned) might be less since new aircraft would cost less to maintain than the current aging fleet. There would also be an additional unknown cost to maintain the new fixed-wing aircraft. 4These amounts may not include all obligations to support the SMW under these task orders because some of the funds obligated prior to July 2012 when the contractor supported the Afghan Air Interdiction Unit may have been spent to support the SMW s initial mobilization costs. Obligations during the full performance period of the task orders (as of April 1, 2013, and including the Ministry of Defense support) totaled approximately $772 million. SIGAR Audit 13-13/Afghan Special Mission Wing Page 1

8 BACKGROUND At a December 2011 Special Operations Summit, ISAF senior leadership identified the development of air support capacity as a priority for improving Afghan military capabilities for counterterrorism and other special operations missions. To respond to this need, NTM-A sponsored a RAND study to assess requirements and provide recommendations. 5 The study s recommendations discussed different scenarios for the planned size in terms of both personnel and aircraft of air support, the command structure, and scope of operations. NTM-A determined that the Afghan Ministry of Interior s (MOI) existing Air Interdiction Unit, 6 a counternarcoticsfocused unit, would provide the best foundation to develop an Afghan counterterrorism and special operations aviation capability, while maintaining critical counternarcotics efforts. On May 12, 2012, NTM-A issued a military order identifying its concept for the establishment of the SMW. 7 On July 18, 2012, the ANA commissioned the SMW, which replaced the Air Interdiction Unit. NTM-A s Concept for the SMW Calls for 48 New Aircraft and 806 Personnel Based on RAND s study, NTM-A developed a concept of operations that defined the Photo 1 - Mi-17s at Kabul International Airport SMW mission and organizational structure and established aircraft and personnel requirements. NTM-A intended the SMW to conduct aviation operations in direct support of the MOI and Ministry of Defense (MOD) counternarcotics, counterterrorism, and special operations forces across Afghanistan. NTM-A recommended that the ANA Special Operations Command have operational control over the SMW, but the MOI and MOD would initially share administrative Source: SIGAR site visit, October 23, 2012 control, including management of personnel and mission development (see appendix III for SMW structure and command and control). NTM-A favored a full transition of the SMW to MOD administrative control, pending the approval of each ministry. To reach full operational capacity, the NTM-A concept calls for 806 Afghan personnel, including pilots, flight engineers, mechanics, and security staff to support the SMW. The concept also calls for the SMW to have 30 rotary-wing and 18 fixed-wing aircraft organized into four squadrons: two based in Kabul, one in Kandahar, and one in Balkh province. Each squadron is designed to include seven Mi-17s (the selected rotary-wing aircraft) 8 5RAND Corporation, Afghan National Army Special Operations Forces: An Assessment of Aviation Requirements, December RAND Corporation is a nonprofit institution that helps improve policy and decision making through research and analysis. Its research is commissioned by global clientele including government agencies, foundations, and private-sector firms. 6In mid-2006 the U.S. government funded the establishment of the Afghan Air Interdiction Unit to support counternarcotics law enforcement operations in Afghanistan. The unit provided general helicopter support to the police. Mentored by the U.S. Army and United Kingdom Royal Air Force, the unit also executed counternarcotics operations with partnered special operations forces. 7Established under fragmentary order In 2005, the U.S. Central Command determined that the Russian-built Mi-17 was the best available platform to rebuild Afghan rotary-wing capabilities. The Afghans had 30 years of experience with Mi-17s, and the U.S. had 6 Mi-17s in its SIGAR Audit 13-13/Afghan Special Mission Wing Page 2

9 and four PC-12s (the selected fixed-wing aircraft). 9 (See photo 1 of Mi-17s at Kabul International Airport.) In addition, the MOI would have a detachment of two Mi-17s and two PC-12s for missions that support the rest of the MOI, including casualty evacuation support. (See figure 1 for planned location and breakdown of aircraft.) The original NTM-A concept called for the two Kabul-based squadrons to be in place by the end of 2012, the Kandahar squadron by the end of 2013, and the Balkh squadron by the end of Figure 1 - Planned Aircraft Locations and Breakdown for SMW Source: SIGAR graphic of NTM-A concept of operations Once delivered, the new Mi-17s will replace the SMW s existing fleet of 30 aging aircraft. The SMW currently has 30 Mi-17s at its disposal, with 20 older aircraft obtained from: the United States (13), United Kingdom (5), and Germany (2). It also has 10 aircraft on loan from the Afghan Air Force. However, because of the maintenance needs of the aging aircraft, only about half of the fleet is mission ready at any given time, most of which are the aircraft from the Afghan Air Force. 10 (For a complete description of the status of the Mi-17 fleet, including origin and age, see appendix II.) inventory. In addition, 19 more Mi-17s had been donated to the Afghan government from other sources. The Mi-17s were considered inexpensive, easy to fly and maintain, and available for purchase. 9A former Assistant Commanding General Special Operations Forces Mobility Commander who was involved in early SMW planning recommended the PC-12 to be the SMW s fixed-wing asset because it has more horsepower and is roomier than the alternatives. Further, the PC-12 has a pressurized cabin, which allows it to fly at a higher altitude and is quieter, which facilitates training. 10Analysis of the older aircraft shows 19 of the 20 are more than 18 years old, while 10 are at least 25 years old. The average mechanical Mi-17 lifespan is 35 years, with a service life extension performed after 25 years to add additional years (based on the condition of the airframe). As of October 15, 2012, 9 of the Mi-17s were in depot maintenance outside of Afghanistan. The remaining fleet is stationed at the Kabul International Airport. SIGAR Audit 13-13/Afghan Special Mission Wing Page 3

10 The SMW s current fleet does not have any fixed-wing aircraft. However, on October 13, 2012, the U.S. Air Force Life Cycle Management Center awarded a $218 million contract 11 to Sierra Nevada Corporation to purchase 18 new PC-12s. On June 16, 2013, DOD awarded a $553.8 million contract modification to Rosoboronexport the sole Russian government agency selling Russian-made defense items and military hardware for 30 Mi-17 rotary-wing aircraft. DOD had delayed this contract action because of political considerations associated with U.S. transactions with this vendor. Specifically, under the fiscal year 2013 National Defense Authorization Act, Congress prohibited contracting with Rosoboronexport. However, by using fiscal year 2012 funds for the award, DOD concluded that it was legally able to proceed with this purchase. Multiple organizations support the development of the SMW. For example, the Deputy Assistant Secretary of Defense for Counternarcotics and Global Threats in Washington, D.C., provides U.S. counternarcotics funding for the SMW. The Non-Standard Rotary Wing Aircraft (NSRWA) Program Management Office in Huntsville, Alabama, provides program management and contract management services for DOD s support of the SMW. In Afghanistan, the Office of the Deputy Commanding General, Special Operations Forces (DCOM-SOF) Embedded Training Team (ETT) supervises training of SMW Afghan pilots, flight engineers, and mechanics. (For a complete list of organizations supporting the SMW and their roles, see appendix III.) DOD Obligated Nearly $122 Million on Two Key Task Orders to Provide Ongoing Maintenance and Logistics Support to the SMW DOD has awarded multiple contracts and task orders to support and develop the SMW. The Federal Acquisition Regulation states that performance-based acquisition is the preferred method for acquiring services. Agency officials are responsible for accurately describing the need to be filled, or problem to be resolved, through contracting to ensure full understanding and responsive performance by contractors. For service contracts, program officials should describe the need to be filled using performance-based acquisition methods. 12 U.S. Army Space & Missile Defense Command wrote task orders 20 and 32, currently valued at nearly $772 million, as level-of-effort type task orders, providing extensive listings of contractor duties. 13 Our audit focuses on these two large task orders that provide ongoing aircraft maintenance and logistical support services. 14 Specifically, the U.S. Army Space & Missile Defense Command awarded: Task order on September 26, 2008, to Northrop Grumman to provide maintenance and logistics support services for Afghan MOI and MOD air assets, as well as training for Afghan pilots, flight engineers, and mechanics. 16 As of April 4, 2013, the amount obligated was approximately $364.6 million, with approximately $50.7 million supporting the SMW since its inception in July Contract FA C Federal Acquisition Regulation section (a) and (e). 13DOD obligated $365 million on task order 20 and $407 million on task order 32. These amounts reflect obligations to provide services for the Afghan MOD as well as the SMW, as of May 6, U.S. Army Space and Missile Defense Command awarded the task orders. To achieve demonstrable synergies, efficiencies, and benefits, the task orders were realigned under Army Contracting Command Redstone in October Currently, NSRWA Contracting Division under Army Contracting Command Redstone manages the task orders. 15Contract W9113M-07-D-0007, task order 20, is a firm fixed-price level of effort task order with cost-plus-fixed-fee contracting line items for cost reimbursable travel, Defense Base Act insurance, materiel, and other direct costs. 16Part of the task order covers the SMW and part covers other MOD assets including the Afghan Air Force. SIGAR Audit 13-13/Afghan Special Mission Wing Page 4

11 Task order on September 30, 2009, to Lockheed Martin Integrated Systems, Inc. for procurement of materiel and spare parts in support of MOI and MOD air maintenance and repair options. As of February 21, 2013, the total obligated amount on task order 32 was approximately $407.1 million, with approximately $71.2 million supporting the SMW since its inception. Coordination between the two contractors is necessary to maintain efficiency since one contractor maintains the aircraft and identifies parts requirements, and the other contractor actually orders the parts. Contractors perform their maintenance and logistics functions at the Kabul International Airport and store spare parts and supplies at a warehouse there (see photo 2). Task orders 20 and 32 each provide services for both the MOI and the MOD; however, each task order lists the services for each ministry separately and the contractors have separate teams supporting each ministry. Services to support the SMW fall under the MOI task order line items. LACK OF PERSONNEL AND TECHNICAL CAPACITY PUT $771.8 MILLION DOD INVESTMENT IN SMW AT RISK The SMW lacks the capacity both in personnel numbers and expertise to operate and maintain its current and planned fleets, and NTM-A and DOD do not have personnel or performance milestones requiring the SMW to develop the necessary capacity before DOD acquires and delivers the full complement of aircraft for the SMW at a cost of $771.8 million for 30 new Mi-17s and 18 PC-12s. 18 The NTM-A concept of operations calls for an SMW comprising 806 personnel at full strength, and DOD officials call for the SMW to have full operational capability by July However, as of January 23, 2013, the ETT Commander confirmed that the SMW had just 180 personnel less than onequarter of the personnel necessary to meet full operational capacity. Moreover, although the original NTM-A concept called for the two Kabul-based squadrons to be in place by the end of 2012, NTM-A later shifted the date calling for the two squadrons to be in place by mid However, neither squadron had been fully established as of May 15, Because of the shortages in personnel and Photo 2 - SMW Warehouse in Kabul Source: SIGAR site visit. SMW warehouse in Kabul, on October 23, 2012 capacity, U.S. military personnel and DOD contractors currently join Afghans when the ETT assembles flight crews for SMW operational missions. 17Contract W9113M-07-D-0006, task order 32, is a firm fixed-price level-of-effort task order with cost-plus-fixed-fee line items for travel (no fee), DBA insurance (no fee), labor, materiel, and other direct costs. 18The SMW intends to return the 10 younger Mi-17s to the Afghan Air Force if the U.S. procures new Mi-17s. In addition, if the procurement is completed, the U.S. has no plans to continue the overhaul of the other 20 aging Mi-17s. SIGAR Audit 13-13/Afghan Special Mission Wing Page 5

12 The NTM-A concept and documentation of the DOD purchase approval do not identify timelines, milestones, or position staffing levels that the SMW should meet to achieve the full staffing levels required to operate and maintain the new aircraft. 19 However, the ETT Commander stated that the staffing level of job types for the planned force of 806 would likely parallel the staffing level for the current force, i.e. the same ratios as the current force. Table 1 shows the breakdown of the SMW force at its current size and its planned size, based on the ratios of the existing force. Table 1 - Current and Planned Breakdown of SMW Afghan Manning by Job Type Job Type Current Number of Staffing Positions a Planned Full Force (Date Undetermined) Pilot Crew Chief/Flight Engineer Mechanic Security Total Source: SIGAR analysis of NTM-A and ETT data and interviews. apositions current as of January 23, Despite the SMW s ongoing personnel shortages and lack of capacity, and despite no clear DOD plan to transfer critical functions to the SMW, DOD plans to proceed with the $771.8 million purchase of 30 Mi17s and 18 PC-12s under its contracts with Rosoboronexport and Sierra Nevada Corporation, respectively. While the aircraft requirements identified by NTM-A are clear, making such a sizeable purchase without clearly linking delivery to SMW development could result in wasted funds, more aircraft than the SMW can operate or maintain, and a requirement for DOD to support the wing at a cost of more than $100 million per year for years to come. 20 The SMW Faces Significant Recruiting and Training Challenges SMW recruiting and training efforts are ongoing to address these shortfalls in SMW personnel, but there are significant recruiting and training challenges. According to DOD and Drug Enforcement Administration officials, these challenges include finding Afghan recruits who are literate and can pass the strict, 18 to 20-month U.S. vetting process a process that attempts to eliminate candidates that have associations with criminal or insurgent activity. The ETT Commander explained that the Afghans identify recruits, the ETT executes its vetting process, and the Afghan SMW Commander makes the final decision about which recruits to approve. According to SMW leadership, the unit prefers recruits who are at least literate in their own language (recruits must also be trained in English photo 3 shows SMW mechanics attending an English training). However, based on this stipulation, even the initial recruiting pool is limited because the Afghan populace is largely 19A former DCOM SOF official who played a major role in developing the concept of operations stated NTM-A s concept was to pursue the aircraft first and then recruit and train the personnel necessary for operation. 20The $100 million cost for operations and maintenance refers just to expenses associated with the full complement of 30 Mi-17s and does not include costs for operating and maintaining the PC-12 fixed-wing aircraft that will also support the SMW. SIGAR Audit 13-13/Afghan Special Mission Wing Page 6

13 illiterate with only 26 percent of the adult population having basic literacy. 21 U.S. officials also stated that many potential recruits are disqualified from service due to prior or ongoing relationships with criminal elements. Additionally, according to training officials, the flow of Afghan trainees from initial rotary-wing training at Ft. Rucker, Alabama, to the Mi-17- specific training in the Czech Republic has been slow and uneven, ranging from a low of two up to eight trainees at a time. 22 The Mi-17 Product Director at NSRWA stated that the transition of Afghan pilots and flight engineers from the Fort Rucker training to Mi-17 training in the Czech Republic has been slow due to the lack of a steady stream of DOD funding for training, failed background checks on the part of pilots and flight engineers, and the Czech government s requirement that each Afghan class participant have an end-user certificate signed by Afghan ministers. 23 According to the SMW Deputy Commander, compensation, especially for mechanic trainees, is also a factor contributing to low levels of Photo 3 - English Language Training Source: SIGAR site visit. A U.S. contractor teaches English to Afghan mechanics in Kabul, October 23, recruitment because Afghan personnel with a basic command of English are in high demand and can earn higher pay elsewhere. The Deputy Commander further stated the compensation levels for all positions are not commensurate with the rare literacy and education skills that the SMW requires from recruits. The recruiting challenge is particularly acute for mechanics, who do not receive incentive bonuses that pilots and flight engineers receive for attending training. Ongoing tensions between the MOI and MOD over administrative control of the SMW also impacts recruitment. The NTM-A concept calls for the transfer of SMW from joint MOI/MOD to strictly MOD command and control. The ETT Commander pushed the Afghan government to make the transition by January 2013 although it did not happen because he believes the transition will allow the SMW to leverage the recruiting efforts and resources of the Afghan Air Force. The Afghan government has generated a draft memorandum of understanding between MOI and MOD to transfer the command authority of the SMW to the MOD. 24 The 21United Nations Office of Drugs and Crime, National Risk and Vulnerability Assessment 2007/8: A profile of Afghanistan. October Once pilots and flight engineers are vetted and achieve the required English competency, they enroll in Initial Entry Rotary Wing training at Fort Rucker, Alabama. This course involves primary aircraft training, followed by instrument training and basic war fighting skills. The entire course lasts about 22 weeks. After passing this initial training course, pilots must complete advanced Mi-17-specific training in the Czech Republic. Mi-17-specific training is expected to transfer to Fort Rucker, with training in the Czech Republic intended as a bridge until Fort Rucker is ready to take over that part of the training. 23The Czech Republic requires an end-user certificate for all trainees to ensure the appropriate use of the knowledge, skills, and abilities transferred to the students as a result of the training. Typically, end-user certificates are used in international arms transfers to certify that the buyer is the final recipient of the materials and is not planning to transfer the materials to another party. 24The ETT Commander stated this commitment to support MOI police missions is critical to gaining MOI endorsement of the plan. The draft memorandum describes SMW missions and states that under the agreement MOD would agree to apportion approximately one in every four missions to MOI element support based on intelligence and target development. MOD would further agree to support MOI requested missions with a minimum of four SMW Mi-17 helicopters and two PC-12s. SIGAR Audit 13-13/Afghan Special Mission Wing Page 7

14 memorandum states that, effective upon publication, the ministries agree the SMW will fall under the command authority of the MOD and be assigned to the ANA Special Operations Command. 25 Nevertheless, the memorandum is still in draft form and remains unsigned by the ministries due largely to MOI resistance to surrendering authority over the SMW. Further, according to the ETT Commander, the MOD is unwilling to allow SMW recruitment from its ranks without assurances that the pilots, once trained, will remain under its control. The ETT Commander stated that he expects recruitment to improve when the two ministries agree on the planned memorandum of understanding that completes the SMW s transition to the MOD. 26 The ETT Commander also stated many new recruits will come from the Afghan Air Force and he stated 15 fixed-wing pilots will be absorbed by the SMW from the MOD when the memorandum of understanding is complete. In addition to the recruitment challenges, in the task order 20 November and December 2012 monthly progress reports, the contractor reported the following issues were negatively impacting training: Maintenance challenges caused a 31 percent decrease in available Northrop Grumman training hours. Northrop Grumman lost training flights due to SMW crew members not showing up for scheduled training. The SMW s flight simulator in Kabul has been inoperable since September 2012 due to lack of needed repairs and an expired warranty. The SMW Relies Heavily on DOD for Maintenance and Logistics Support Compounding the challenges faced in recruiting and training personnel, the SMW may not be able to perform maintenance and logistics support function on its own without continued assistance from DOD. According to the responsible contractors, they perform 50 percent of the maintenance and repairs to the SMW s current fleet of Mi-17s, with SMW Afghan mechanics performing the rest under the contractor s mentorship at a hangar at Kabul International Airport (see photo 4). The contractors also stated that they perform 70 percent of logistics and maintenance management, 27 as well as procurement of spare parts and materiel (under task order 32). 28 U.S. military, U.S. Photo 4 - Mi-17 Undergoing Maintenance Source: SIGAR site visit to SMW hangar in Kabul on October 23, The memorandum also discusses command authorities for mission prioritization, allocation of SMW resources, and conflict resolution, and identifies continued support that would be provided to the MOI. 26The ETT referred to the memorandum of understanding as a cipher. 27Maintenance under task order 20 includes managing schedules for routine aircraft maintenance and maintaining aircraft air worthiness certificates by tracking and recording repairs and maintenance for each aircraft. Task order 20 also requires logistics support which comprises warehouse management and inventory control. Task order 20 requires the contractor to provide training to Afghan maintainers, but is not specific regarding training or assistance to Afghans in establishing a maintenance management system. 28Task order 32 requires repair of repairable parts services and procurement services but does not contain provisions for training Afghans. There is no training requirement under task order 32. SIGAR Audit 13-13/Afghan Special Mission Wing Page 8

15 Drug Enforcement Administration, and contractor personnel all acknowledge that this type of support is essential for the sustainment of the SMW beyond the U.S. military drawdown scheduled for However, the ETT Commander and U.S. government contractors acknowledge that the Afghan government will not be able to independently perform maintenance and logistics support functions for at least 10 years. While the NTM-A concept for the SMW discusses aircraft and staffing in general terms, it does not contain any discussion of logistics and maintenance support. Furthermore, DOD does not have a formal plan for transferring this critical support responsibility to Afghan control. Consequently, neither task order 20 nor task order 32 identifies how or when the contractor should begin transitioning management responsibilities to the SMW or specify associated training and performance measures. Senior Northrop Grumman officials in Afghanistan stated that the SMW does not provide enough Afghans with sufficient education to perform these logistic and maintenance support functions. As a result, they have elected to directly hire some local Afghans with stronger skills than the skills demonstrated by the Afghans provided by the SMW. Northrop Grumman is training these new hires on maintenance management, in hopes of building the early stages of an Afghan civilian service to support the Afghan military. The officials stated that training direct local hires is better than training the Afghans serving in the SMW because the direct hires are accountable to the contractor. Northrop Grumman is taking this approach on its own; the task order 20 performance work statement has no such requirement. The SMW Is Largely Incapable of Fulfilling Its Counterterrorism Responsibilities The SMW lacks the capacity to conduct counterterrorism missions part of its stated role. Key stakeholders including U.S. Drug Enforcement Administration officials, who sometimes fly with the SMW were pleased with the SMW s responsiveness to counternarcotics mission requests and stated that the SMW successfully executes its traditional, counternarcotics mission, even at times independent of U.S. and allied forces. However, the SMW has conducted very few pure counterterrorism missions, 29 in part because counterterrorism missions are primarily flown at night, requiring pilots certified to fly using night vision goggles. As of January 16, 2013, only 7 of the 47 pilots assigned to the SMW were fully mission qualified to fly with night vision goggles. From SMW conception in May 2012 to our in-theater field work in October 2012, the SMW conducted 25 operations, only one of which was a pure counterterrorism mission. 30 (See table 2 for a category breakout of these missions.) 29According to the ETT Commander, a pure counterterrorism mission is a counterterrorism mission that has no nexus to a counternarcotics mission. As Afghan pilots gain experience in night flying, the SMW expects to fly more counterterrorism missions. 30In January 2013, the ETT Commander stated that the current operations tempo is 80 percent counternarcotics missions and 20 percent counterterrorism missions. SIGAR Audit 13-13/Afghan Special Mission Wing Page 9

16 Table 2 - SMW Operations Completed from May 1, 2012, through October 14, 2012 Type of Mission Number of Missions Counternarcotics Nexus a 14 Counterterrorism 1 MOI Support b 10 Total Operations 25 Day 22 Night 3 Source: SIGAR Analysis of Office of the Deputy Commanding General Special Operations Forces data, 10/14/12 Notes: aaccording to the ETT Commander, missions can support both counternarcotics and counterterrorism at the same time. Counternarcotics Nexus indicates missions that have at least some connection to the counternarcotics mission, as opposed to a pure counterterrorism mission. bmoi Support missions refer to missions in support of the rest of MOI that are of general support nature, including human remains transfer, casualty evacuation support, and missions the Minister directs for immediate launch. According to the ETT Commander, until the MOI and MOD sign the memorandum of understanding, MOI personnel assigned to the SMW cannot conduct counterterrorism missions because their life insurance coverage, which was provided through the MOI, does not cover deaths resulting from these types of missions. The transition of command and control to the MOD would mean that the MOI personnel would become MOD personnel and covered by MOD life insurance when conducting counterterrorism missions. The ETT Commander also stated that 15 MOD fixed-wing pilots will be absorbed into the SMW after the memorandum is complete. Another potential impediment to the SMW s successful completion of its newly expanded counterterrorism mission is the size of the ETT. Because of restrictions on contractors as warfighters codified in the Geneva Conventions contractors are prohibited from participating in pure counterterrorism missions. As a result, the SMW largely relies on the ETT to support the counterterrorism missions that it cannot independently execute. However, as of May 2013, the ETT had filled only 10 of its 14 positions and was facing challenges increasing its size beyond the 14 authorized positions. In September 2012 to coincide with the SMW s planned growth in end strength from 180 to 806 DCOM-SOF requested a total of 23 ETT positions. As a result of a shrinking international footprint throughout Afghanistan, however, NTM-A instructed DCOM-SOF to lower its request. Nevertheless, the DCOM-SOF Commanding Officer believes the additional trainers are required and told us that he would again request additional ETT personnel following the planned U.S. military reorganizations in SIGAR Audit 13-13/Afghan Special Mission Wing Page 10

17 DOD S EXECUTION OF TASK ORDERS FOR ONGOING MAINTENANCE AND LOGISTICS SUPPORT FAILED TO HOLD CONTRACTOR ACCOUNTABLE FOR ITS PERFORMANCE In addition to our review of SMW capacity to operate and maintain its current and planned fleet, we reviewed DOD oversight of ongoing maintenance, logistics, and supply services under two major DOD task orders that support the SMW. In general, we found that an absence of measurable outcomes, as well as poor contract oversight and quality assurance practices, limited DOD s ability to assess whether the contracts were achieving their intended purposes and presented opportunities for the contractor to underperform. We also found that these two task orders are set to expire soon and that NSRWA has not yet issued or taken meaningful action to issue a new contract. As a result, there is concern that ongoing operations and/or support may be interrupted. DOD Task Orders Lack Performance Metrics We only identified one measureable outcome in one of the two task orders a requirement under section of task order 20 for the contractor to maintain assigned aircraft in theater at a fully mission capable rate at or above 70 percent. 31 However, the task order does not set any consequences for failing to meet that rate. Specifically, we found that Northrop Grumman failed to properly account for certain aircraft hours in depot maintenance, resulting in a misrepresentation of readiness. When calculating the total hours that aircraft are on hand for the reporting period, Northrop Grumman is required to include hours that aircraft are in depot maintenance, unless the aircraft has been transferred to another facility. Starting with the SMW s inception in July 2012, Northrup Grumman failed to calculate the correct hours, resulting in over-reporting the fully mission capable rate for every monthly period. 32 This miscalculation meant the contractor did not actually achieve the prescribed 70 percent fully mission capable rate for 3 of the 5 months for which reporting was available. (See figure 2 for details on the differences between the reported rates and the actual rates.) Further, task order 20 requires the reporting format outlined in Army Regulation calling for the Commander, or government representative, to review, sign, and submit the form reporting the readiness rates. However, the contractor not the U.S. military commander or government representative signed the forms it submitted to NSRWA. 31Army Regulation defines fully mission capable as a status condition where fully operational equipment or systems are safe and correctly configured as designated by the U.S. Army. Equipment is fully mission capable when it can perform all of its combat missions without endangering the lives of crew or operators. 32A monthly period runs from the 16 th day of a month to the 15 th day of the following month. SIGAR Audit 13-13/Afghan Special Mission Wing Page 11

18 Figure 2 - Contractor Air Interdiction Unit (AIU)/Special Mission Wing (SMW) Fleet Data Versus Army Regulation (AR) (in percent) Sources: SIGAR analysis of Northrop Grumman data and U.S. Army Regulation The performance work statement for task order 20 also requires Northrop Grumman to provide aircraft maintenance, flight training, and operational support for SMW missions. 33 The performance work statement describes the types of training required, but does not identify measureable outcomes to determine if the training achieves results. For example, section 3.4 of the task order states, Contractor instructor pilots shall be responsible for leading, training and advising student pilots progressively to full mission qualification across all country unique terrain and weather conditions. However, there are no measurements or timelines for these outcomes. Section 3.4 contains flight training requirements and states that Northrop Grumman s instructor pilots shall provide hands on training in the configuring of the aircraft for missions [and] visually and orally discuss/summarize tactics, techniques and procedures, but does not identify metrics to assess whether the training is achieving results. In October 2012, Northrop Grumman contractors stated night vision goggle training had only recently been added to task order 20, even though this type of training had been a program goal for some time and had not been executed. As discussed earlier in this report, delays in this type of training will impact the number and experience of SMW pilots available to fly these types of missions. Similarly, task order 32 performance work statement describes the contractor s Lockheed Martin s duties and identifies deliverables such as progress reports and a management plan, but it does not provide specific measures of the quality of services. 33A performance work statement for performance-based acquisitions describes the required results in clear, specific, and objective terms with measurable outcomes. SIGAR Audit 13-13/Afghan Special Mission Wing Page 12

19 DOD Oversight of Contractor Performance under Task Orders Was Limited NSRWA Contracting Division is responsible for overseeing contractor work on the task orders, including fleet readiness reporting. With better oversight, an NSRWA contracting officer representative (COR) might have identified Northrop Grumman s failure to calculate the correct fleet readiness, provided decision-makers with accurate data, and evaluated Northrop Grumman more effectively. The contracting officer responsible for these task orders is responsible for deciding the need for an individual(s) to serve as an authorized representative for purposes of monitoring the technical or administrative aspects of contractor performance during the life-cycle of a contract. Contracting officers must delegate specific authorities to a COR to perform the functions needed to ensure the contractor provides quality products and services, in accordance with their contracts. In March 2011, the contracting officer for task orders 20 and 32 appointed the current COR to monitor the contractors. According to the COR s appointment letter, the COR must keep the Contracting Officer, fully informed of any technical or contractual difficulties encountered during performance, and assure the KO [contracting officer] that the contractor is performing the technical requirements of the contract/task order in accordance with contract terms, conditions, and specifications. The appointment letter further states the COR should, implement government contract quality assurance actions in accordance with the Federal Acquisition Regulation and the task order quality assurance surveillance plan. The letter notes that the COR must observe, monitor, and assess the contractor s performance under the terms of the contract/task order, and perform routine inspections of the contractors work products and deliverables, which requires the COR to have a regular presence at the place of performance. The principle COR 34 for task orders 20 and 32 (also responsible for at least seven other task orders) works from Redstone Arsenal in Huntsville, Alabama. The COR stated he relies on the contractor s deliverables and teleconferences to oversee performance. Based upon the duties assigned in the COR s appointment letter, the COR cannot properly execute the oversight responsibilities outlined in his appointment letter from Alabama. For example, the COR cannot observe contractor work or perform inspections. Northrop Grumman officials stated that an in-country COR would be useful for providing feedback to the contractors regarding their performance. The contractors also stated that NSRWA did not have awareness of security threats to the contractors, whose camp is located near the airport, and the effect security threats have on the contractor s ability to perform. To demonstrate evaluation of contractor performance, NSRWA provided us with a document called Contractor s Quarterly Interim Progress Report, dated November 22, However, this report only evaluates one quarter for one task order, and NSRWA has not completed any additional evaluations. The completed report evaluates Lockheed Martin s performance on task order 32 for the period of August 2011 through October The evaluator rated the contractor s performance as satisfactory, or better, in all categories. However, the report does not include the name of the evaluator so it is not clear that it was prepared by an authorized official and the evaluation did not provide any quantitative measures and is not tied to a quality assurance surveillance plan. To help ensure some Afghanistan-based oversight of these task orders, NSRWA deployed representatives in 2012 to Afghanistan, but these representatives were not formally appointed with specific oversight responsibilities. For example, when we visited the SMW in October and November 2012, one NSRWA liaison was present, but the liaison did not have any formal oversight responsibilities for the task orders. When we met with NSRWA in January, a senior program management official stated that NSRWA was taking action to improve oversight. The NSWRA liaison in Kabul was appointed as a COR for task orders 20 and 32 in December 2012, and a second individual was appointed as a COR on task order 20 in the same month. 34NSRWA Contracting Division appointed two additional CORs for task order 20 in Afghanistan in December SIGAR Audit 13-13/Afghan Special Mission Wing Page 13

20 Although NSRWA contracting presence in Afghanistan has recently increased, senior contractor officials and a senior official at DCOM-SOF expressed concerns that the real authority continues to reside in Huntsville. 35 Task Orders Lack Appropriate Quality Assurance Surveillance Plans The Federal Acquisition Regulation and the Defense Federal Acquisition Regulation Supplement require agencies to develop and manage a systematic, cost-effective quality assurance program to ensure that contract performance conforms to specified requirements. 36 These regulations also require that the government conduct quality assurance at such times (including any stage of manufacture or performance of services) and places (including subcontractors plants) as may be necessary to determine that the supplies or services conform to contract requirements. Quality assurance surveillance plans should be prepared in conjunction with the statement of work. The plans should specify (1) all work requiring surveillance and (2) the method of surveillance. Task orders 20 and 32 do not have quality assurance surveillance plans. Each task order has a performance requirements summary in the form of a matrix. However, these matrices, which are appended to the task orders, do not meet the federal requirements to develop a quality assurance surveillance plan. The matrices in the two task orders are identical, suggesting the contracting agency used a template rather than developing individual plans that are specific to each statement of work. These matrices identify four performance objectives, including quality of service, adherence to schedule, cost control, and small business participation; a government representative (an evaluator ) is responsible for ensuring adherence to the performance requirements. The Counter Narcoterrorism Technology Program Office, which managed the contracts prior to their transfer to NSRWA, developed a draft of an overall quality assurance surveillance plan or master plan, which was to be used in the development of unique surveillance plans for task orders. The master plan provides direction on developing the elements of the task order s unique plans. However, the master plan is a draft and was not officially approved as recommended by the DOD Office of Inspector General in In addition, a document titled Task Order Surveillance Approach for task order 20 provides some information, such as location of inspections; however, this document was never incorporated into the task order. Also, the performance requirements summaries do not conform to the U.S. Army Contracting Command s elements of a good performance requirement summary, and the performance indicators are not sufficiently measureable as defined in the Federal Acquisition Regulation to identify the following: key performance indicators requiring surveillance, when the COR will inspect and how surveillance will be conducted, and the method used to assess whether performance objectives are being met. The COR for task orders 20 and 32 acknowledged that the task orders do not contain quality assurance surveillance plans, but the COR stated that he is preparing quality assurance surveillance plans. The objective of contract surveillance is to monitor contractor performance and ensure the services received are consistent with contract quality requirements and received in a timely manner. Without well-written plans, the contracting officer cannot effectively evaluate the contractor performance when deciding to execute the option years. In addition, the U.S. may not receive the best benefit of maintenance and logistics services 35The U.S. Army Aviation and Missile Command s Aviation/Missile Resource Assessment and Analysis team completed an assessment of SMW contract oversight, as well as SMW operational issues. The assessment provided multiple recommendations, and senior officials stated they will travel to Kabul in March 2013 and be on the ground for 60 days in an effort to reshape the NSRWA support and oversight of the task orders. 36Defense Federal Acquisition Regulation Supplement, subpart and Federal Acquisition Regulation, part (a). 37Contracts Supporting the DOD Counter Narcoterrorism Technology Program Office, Report D , 9/25/2009, pgs SIGAR Audit 13-13/Afghan Special Mission Wing Page 14